Subscribe
E-Paper
 |
| Finance Minister Hong Nam-ki / Yonhap |
Lawmakers will question President Moon Jae-in's second finance minister and his team on whether Hong has achieved tangible results since he took office 100 days ago, given the weak job data and worsening inequality.
Hong was appointed as finance minister in early December.
He will be presenting his ministry's 2019 plan at the National Assembly this Thursday, along with Financial Services Commission Chairman Choi Jong-ku.
When Hong was named the top fiscal policymaker, he signaled a change in the direction of the administration's economic policy, giving innovation in the private sector as much importance as Moon's income growth.
He then pledged to communicate more with private companies, big or small, to reinvigorate growth beset by shocks from rapid minimum wage hikes, unemployment and trade protectionism.
The finance ministry projected the economy to advance 2.8 percent in 2019, with a target of creating 150,000 jobs this year.
Over the past 100 days, he has increased communication and reduced miscommunication unlike the previous economic team led by Kim Dong-yeon and Jang Ha-sung, the former presidential chief of staff for policy.
Kim and Jang had been at odds over the administration's policy direction, with Kim calling it a "crisis" in decision-making at Cheong Wa Dae, where President Moon was more focused on revitalizing relations with North Korea than the economy.
Analysts say it will take a while for the market to "actually" move in response to the policy signal Hong is trying to send to the private sector.
The top fiscal agenda at the National Assembly this Thursday is expected to be whether the finance ministry will again have to execute an extra budget as recently suggested by the International Monetary Fund (IMF).
Still the weak employment and consumption and falling exports will back Hong to argue for a supplementary budget.
This is because it needs approval from lawmakers before the finance ministry either issues more bonds or uses its coffers for extra spending.
"The administration is likely to devise a supplementary budget as jobs still have not improved in the self-employed sector," said Lee Sang-jae, an economist at Eugene Investment & Securities.
The IMF has recommended the Moon administration to allocate over 0.5 percent of the country's gross domestic product for extra spending to support growth.
That is nearly 9 trillion won ($7.8 billion).
"To support short-term growth and contain risks, the authorities should provide more fiscal stimulus through a supplementary budget, with measures that promote potential output," Tarhan Feyzioglu, the head of the IMF mission to Korea, said at a press conference in Seoul, March 12.
"The Bank of Korea should have a clearly accommodative monetary policy stance, and the authorities should maintain appropriately tight macroprudential policies to preserve financial sector resilience."
